Core Viewpoint - Orix Corp. has shown significant stock performance, hitting an all-time high and demonstrating strong financial results, making it an attractive long-term investment opportunity. Company Performance - Orix Corp.'s ADR reached an all-time high of $34.31 before closing at $33.99, reflecting a daily gain of 5.23% [2] - The company's shares have increased by 36% over the past 17 months, translating to an annualized return of 25.4%, alongside a 3.0% dividend yield [4] - For the nine months ending December 31, 2025, Orix reported a revenue increase of 12% to 2.41 trillion Japanese yen ($15.42 billion) and a net earnings jump of 43% to 567.72 billion Japanese yen ($3.63 billion) [7] Financial Highlights - In Q3 2026, Orix's revenue was $5.42 billion, exceeding Wall Street's estimates by $320 million, with earnings per share of $0.68, one cent above analyst expectations [6] - The company operates with a diversified business model, consisting of 10 operating segments, which contributes to its stability and growth potential [5][6] Investment Rationale - The company is viewed as a financial conglomerate with a balanced diversification among its segments, making it a compelling investment choice [6] - The positive sentiment towards Orix is partly influenced by Warren Buffett's investment in Japanese trading companies, which has drawn attention to Orix's business operations [5]

Core Viewpoint - The article emphasizes the importance of identifying value stocks in the Asian market, particularly those listed in Hong Kong, that exhibit significant discrepancies between their market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] Group 1: Investment Strategy - The research service Asia Value & Moat Stocks targets value investors looking for stocks with a substantial gap between price and intrinsic value [1] - The service specializes in deep value balance sheet bargains, such as net cash stocks, net-nets, low price-to-book (P/B) stocks, and sum-of-the-parts discounts [1] - It also focuses on wide moat stocks, which are high-quality businesses with strong earnings power available at a discount [1] Group 2: Market Focus - The primary focus of the investment group is on the Hong Kong market, leveraging over a decade of experience in Asian equity markets [1] - The group provides a range of watch lists with monthly updates to assist investors in identifying potential investment opportunities [1]

Core Insights - Orix Corp reported a net income of JPY 389.7 billion for the nine months ended December 31, 2025, marking an increase of JPY 117.9 billion year-over-year, representing 89% of the revised full-year forecast of JPY 440 billion [2] Financial Performance - Pre-tax profit for the nine-month period was JPY 567.7 billion, up JPY 184.3 billion year-over-year, with profits increasing across all three categories: finance, operation, and investments, particularly strong in the investments category [3] Shareholder Returns and Buyback Progress - Orix expanded its share buyback program to JPY 150 billion, with JPY 128.1 billion completed by the end of January, achieving an 85% progress rate [4] - The company aims for a full-year payout ratio of 39% of net income per share, translating to approximately JPY 153 per share based on the JPY 440 billion net income forecast [5] Segment Performance Highlights - Finance segment profit increased 8% year-over-year to JPY 145.5 billion, attributed to growth in investment income and higher finance revenues in Australia and Asia excluding Greater China [6] - Operation segment profit rose 17% to JPY 189.5 billion, supported by gains from partial sales of shares in Canara Robeco and improvements in airport concessions and real estate operations [7]

Financial Data and Key Metrics Changes - Net income for the 9-month period was JPY 389.7 billion, an increase of JPY 117.9 billion year-over-year, marking the highest third-quarter cumulative net profit ever [2] - Pre-tax profits reached JPY 567.7 billion, up by JPY 184.3 billion year-over-year, with all three categories of finance, operation, and investments showing profit growth [3] - Shareholder returns were enhanced with an expansion of the share buyback program from JPY 100 billion to JPY 150 billion, with JPY 128.1 billion completed by the end of January [3] Business Line Data and Key Metrics Changes - Finance segment profits increased by 8% year-over-year to JPY 145.5 billion, driven by growth in investment income and finance revenues in Australia and Asia [4] - Operation segment profit rose by 17% to JPY 189.5 billion, supported by gains from airport concessions and real estate operations [4][5] - Investment segment profits surged by 100% year-over-year to JPY 261.4 billion, significantly boosted by gains from the sale of Greenko shares and other investments [6][7] Market Data and Key Metrics Changes - The environment energy segment profit increased by JPY 109.1 billion year-over-year, reaching JPY 122.2 billion, primarily due to gains on the sale of Greenko Energy Holdings [17] - The insurance segment profit rose by 20% year-over-year to JPY 74.1 billion, driven by expansion in investment assets and portfolio securities [18] - The banking and credit segment profit decreased by JPY 2.2 billion year-over-year to JPY 19.9 billion, impacted by rising funding costs and credit losses [19] Company Strategy and Development Direction - The company aims to drive sustainable growth and improve capital efficiency while maintaining its full-year net income forecast [8] - Organizational reforms were announced to restructure into three business divisions, although the current fiscal year will continue under the existing 10-segment framework [11] - The company is focusing on capital recycling, with JPY 196.6 billion in capital gains and ongoing investments in operations and PE investments [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic economy's growth and the performance of various segments, including automotive and IT [42][43] - There is caution regarding the impact of rising interest rates and potential credit losses, with a focus on maintaining financial soundness [51][54] - The management is committed to evaluating business plans regularly to ensure alignment with capital efficiency and profitability goals [45][72] Other Important Information - The company has made significant investments in AI infrastructure and logistics facilities, indicating a strategic focus on technology and operational efficiency [10] - The impact of inbound tourism on earnings is being monitored, particularly concerning the decline in Chinese passenger numbers [24][25] - The company is actively managing its portfolio to mitigate risks associated with legacy assets and market fluctuations [21][22] Q&A Session Summary Question: Details on ORIX USA and Hilco Global integration - Management confirmed that valuation gains from ORIX Capital Partners were significant and that a 100-day plan for Hilco Global is being executed to enhance collaboration [35][36] Question: Overall progress and performance against the plan - Management highlighted strong performance in investments and operations, with expectations for continued growth despite potential challenges in the fourth quarter [41][44] Question: Clarification on U.S. valuation gains - Management indicated that the strong performance of U.S. investees, particularly in technology, contributed positively to the overall results [46][80] Question: Cost considerations for the fourth quarter - Management acknowledged potential credit costs and emphasized a cautious approach to project evaluations, particularly regarding Erawan [49][52] Question: Changes in employed capital ratio and risk appetite - Management explained that the employed capital ratio was recalibrated for more detailed risk assessment, with no direct impact on risk appetite [58][60] Question: Capital gains and base profit disclosures - Management clarified that capital gains were not incorporated in the same manner as before, focusing instead on base profit growth [66][67] Question: Future plans for profit growth and ROE targets - Management emphasized the importance of capital efficiency and the potential for continued profit growth, with a focus on high-quality investments [71][72]

Financial Data and Key Metrics Changes - Net income for the 9-month period was JPY 389.7 billion, an increase of JPY 117.9 billion year-over-year, marking the highest third-quarter cumulative net profit ever [2][3] - Pre-tax profits reached JPY 567.7 billion, up by JPY 184.3 billion year-over-year, with growth across all three categories: finance, operation, and investments [3][7] - Shareholder returns were enhanced with an expanded share buyback program from JPY 100 billion to JPY 150 billion, with JPY 128.1 billion completed by the end of January [3][4] Business Line Data and Key Metrics Changes - Finance segment profits increased by 8% year-over-year to JPY 145.5 billion, driven by growth in investment income and finance revenues in Australia and Asia [4][5] - Operation segment profit rose by 17% to JPY 189.5 billion, supported by gains from airport concessions and real estate operations [4][5] - Investment segment profits surged by 100% year-over-year to JPY 261.4 billion, significantly boosted by gains from the sale of Greenko shares and other investments [6][7] Market Data and Key Metrics Changes - The environment energy segment profit increased by JPY 109.1 billion year-over-year to JPY 122.2 billion, primarily due to gains on the sale of Greenko Energy Holdings [17] - The insurance segment profit rose by 20% year-over-year to JPY 74.1 billion, driven by expansion in investment assets and portfolio securities [18] - The banking and credit segment profit decreased by JPY 2.2 billion year-over-year to JPY 19.9 billion, impacted by rising funding costs and losses from selling long-term bonds [19] Company Strategy and Development Direction - The company aims to drive sustainable growth and improve capital efficiency while maintaining its full-year net income forecast [8][9] - Organizational reforms were announced to restructure into three business divisions, although the current fiscal year will continue under the existing 10-segment framework [11] - The company is focusing on capital recycling, with JPY 196.6 billion in capital gains and ongoing investments in operations and PE investments [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the domestic economy's growth and the performance of various sectors, including automotive and IT [42][44] - There is caution regarding the impact of rising interest rates and potential credit losses, with a focus on maintaining financial soundness [19][51] - The management is closely monitoring the situation in China, particularly regarding inbound tourism and its effects on earnings [24][25] Other Important Information - The total assets increased by JPY 1.2594 trillion compared to the end of last year, with significant contributions from the consolidation of Hilco Global [28] - The employed capital ratio was adjusted to 89%, reflecting improved risk management practices [58][60] - The company plans to maintain a payout ratio of 39% of net income per share, with flexibility in shareholder returns [30][72] Q&A Session All Questions and Answers Question: Details about ORIX USA and Hilco Global integration - Management confirmed that valuation profit within the portfolio was significant, and they are executing a 100-day plan for Hilco Global integration [33][35] Question: Overall progress and performance against the plan - Management highlighted strong performance in investments and operations, with expectations for continued growth despite potential challenges in the fourth quarter [40][41] Question: Clarification on U.S. valuation gains - Management indicated that the performance was within expectations, with strong growth in technology-related investees contributing to the results [46][47] Question: Cost considerations for the fourth quarter - Management acknowledged potential credit costs and emphasized a cautious approach to project evaluations, particularly regarding Elawan [49][51] Question: Changes in employed capital ratio and life insurance liabilities - Management explained that the employed capital ratio was recalibrated for better risk assessment, and discussions are ongoing regarding life insurance liabilities [58][62] Question: Capital gains and base profit disclosures - Management clarified that capital gains were not incorporated in the same manner as before, focusing instead on base profit growth [66][67] Question: Future investment strategies and ROE targets - Management emphasized the importance of capital efficiency and the potential for continued profit growth, with a focus on high-quality investments [71][72]

Financial Data and Key Metrics Changes - Net income for the 9-month period was JPY 389.7 billion, an increase of JPY 117.9 billion year-over-year, marking the highest third-quarter cumulative net profit ever [2][3] - Pre-tax profits reached JPY 567.7 billion, up by JPY 184.3 billion year-over-year, with all three categories of finance, operation, and investments showing profit growth [3][6] - Shareholder returns were enhanced with an expanded share buyback program from JPY 100 billion to JPY 150 billion, with JPY 128.1 billion completed by the end of January [3][4] Business Line Data and Key Metrics Changes - Finance segment profits increased by 8% year-over-year to JPY 145.5 billion, driven by growth in investment income and finance revenues in Australia and Asia [4][5] - Operation segment profit rose by 17% to JPY 189.5 billion, supported by gains from airport concessions and real estate operations [5][6] - Investment segment profits surged by 100% year-over-year to JPY 261.4 billion, significantly boosted by gains from the sale of Greenko shares and other investments [5][6] Market Data and Key Metrics Changes - The environment energy segment profit increased by JPY 109.1 billion year-over-year, reaching JPY 122.2 billion, primarily due to gains on the sale of Greenko Energy Holdings [16][17] - The ORIX USA segment showed a profit of JPY 14 billion for the 9-month period, reflecting a positive recovery despite previous credit losses [20][21] - The Asia and Australia segment profit increased by JPY 11.4 billion, a 41% rise year-over-year, driven by financial income from local operations [23] Company Strategy and Development Direction - The company aims to drive sustainable growth and improve capital efficiency while maintaining its full-year net income forecast [7][8] - Organizational reforms were announced to restructure into three business divisions, although the current fiscal year will continue under the existing 10-segment framework [10] - The company is focusing on capital recycling, with JPY 196.6 billion in capital gains and ongoing investments in operations and asset valuation businesses [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impact of declining Chinese passenger numbers on earnings, particularly in the tourism sector [24][25] - The company anticipates a mixed outlook for the next fiscal year, with potential downside risks due to economic uncertainties and rising interest rates [39][43] - There is a focus on maintaining financial soundness while enhancing future profitability, especially in light of rising funding costs [18][31] Other Important Information - Total assets increased by JPY 1.2594 trillion compared to the end of last year, with significant contributions from the consolidation of Hilco Global [29][30] - The company reported a reduction in insurance contract liabilities by JPY 234.2 billion, attributed to a higher discount rate used for measurement [30][51] - The employed capital ratio was adjusted to reflect more detailed risk management, resulting in a decrease from 92% to 89% [49][50] Q&A Session Summary Question: Details on ORIX USA and Hilco Global integration - Management confirmed that valuation profit within the portfolio showed significant growth, and they are executing a 100-day plan for Hilco Global integration [32][34] Question: Progress against the business plan - Management noted strong progress in investments and operational performance, particularly in the divestiture of non-core businesses [37][38] Question: Credit costs and potential losses - Management acknowledged the potential for credit costs and losses but emphasized ongoing monitoring and proactive measures to address risks [41][42] Question: Changes in employed capital ratio and future investments - The employed capital ratio was recalibrated for more precise risk assessment, allowing for flexible investments while maintaining a conservative approach [49][50] Question: Outlook for next fiscal year - Management indicated that while the current fiscal year is performing well, they remain cautious about the next fiscal year due to economic uncertainties [56][58]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

ORIX Corporation Consolidated Financial Results For the Nine-Month Period Ended December 31, 2025 Kazuki Yamamoto Operating Officer, Corporate Strategy and Management Unit, Responsible for Corporate Planning, Investor Relations and Sustainability February 9, 2026 1 Copyright © ORIX Corporation All rights reserved. ※ テンプレートデザインの個別編集禁止 Executive Summary (1) Net income (2) Pre-tax profits ‒ Q1-Q3 pre-tax profits were 567.7 Bln JPY (+184.3 Bln JPY), growth achieved in all three categories (profits higher even e ...

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Core Insights - The article emphasizes the focus on value investing in Asia, particularly in Hong Kong, targeting stocks with significant discrepancies between market price and intrinsic value [1] - It highlights two main categories of investment opportunities: deep value balance sheet bargains and wide moat stocks, which are characterized by their strong competitive advantages [1] Group 1: Investment Strategy - The investment strategy involves seeking deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) ratio stocks [1] - The strategy also includes identifying wide moat stocks, which are high-quality businesses with sustainable competitive advantages [1] Group 2: Research Service - The research service, Asia Value & Moat Stocks, provides value investors with ideas and monthly updates on potential investment opportunities in the Asian market [1] - The service is led by an analyst with over a decade of experience in the equity market, specializing in both buy and sell sides [1]